Tax collectors in Costa Rica are ready to start looking for owners of luxury properties who lease their homes for less than 30 days at time; however, they currently lack the legislative approval to do so. This does not mean that preliminary investigations will cease until a law is passed; in fact, revenue investigators will increase their intelligence collection in the next few months.

 

Costa Rica is one of the most expensive real estate markets in Latin America; to this end, spectacular beachfront mansions and opulent mountain estates can be rented for as high as $2,000 per day. A legislative proposal to identify these properties has been in the works since the days of the Chinchilla administration, and the idea is to levy a 13 percent sales tax on “casual rental income” collected for lease terms under a month.

 

Under the administration of President Luis Guillermo Solis, new taxes have been eschewed in favor of revenue collection enforcement, and the Ministerio de Hacienda (the Treasury) is ready to pounce once legislation is passed and enacted. According to a report by Pablo Rojas of online news daily Costa Rica Hoy, revenue investigators have already amassed considerable information on the luxury homes that are being offered for rent; they can be easily found on Web pages, dedicated websites such as Airbnb and HomeAway, social networks, email newsletters, and foreign newspapers. For the record, The Costa Rica Star has advertised such properties in the past.

 

According to the Fernando Rodriguez, Vice Minister of Treasury, many hoteliers have complained that they cannot compete against this market of privately-owned luxury homes that are dodging taxes. Some owners of this upscale homes in Costa Rica are already declaring their rental incomes to revenue collectors, but there is not too much uniformity in this regard. Since this is a bit of an “underground market,” the Treasury cannot estimate how much can be collected from casual luxury rentals.